If only present day global competition were confined to the World Cup. But while eyes have turned back to a new crisis in Iraq—something I’m not exactly proud of predicting here—at least there has been progress on the Ukraine crisis, which has gone from boil to simmer in recent weeks. At this stage it has become clear that Russia has blinked, and thus will not be swallowing eastern Ukraine whole. Just as important, we now have clear as day evidence that President Putin’s gambit has failed:  Ukraine has not only signed the EU trade agreement that former President Yanukovych walked away from—sparking the crisis in the first place—newly elected President Petro Poroshenko formally asked the EU to open membership negotiations with his government. In other words Msr. Putin may have purloined Crimea, but he has lost Ukraine proper.

Strategically speaking, it matters less that the EU is no longer as rosy about bringing Ukraine fully into its membership fold. After all, previously doing so was one of the major causes of the now receding crisis. It is more important that the EU signed precisely the same trade deal, with the very ink pen that Yanukovych would have used had he gone through with it last year. More important still is the fact that Ukraine continues to tilt west not east, and in landslide public opinion terms. Not only did Poroshenko achieve an electoral landslide, but there even remains a majority of citizens in eastern Ukraine that do not want to be part of Russia.

But the EU has also done something it previously had not:  it threatened that a new round of much more punitive sanctions would be levied against Russia if it did not stop destabilizing eastern Ukraine by sending in mercenaries, ammunition, and major military equipment in continual violation of Ukraine’s porous border—this time with a deadline.  Defying a host of predictions both in Europe and back in the U.S., German Chancellor Merkel has actually stepped up to begin providing forceful strategic leadership. The U.S. is also preparing a new more punitive round of sanctions. And Putin has foresworn any direct use of force after—blink—pulling the 40,000 Russian troops back from the border.

Predictably, however, at present the negotiations that were underway to extend the ceasefire between Ukraine and Russia—brokered by France, Germany, and the OSCE—have broken down. Poroshenko has rescinded the ceasefire, claiming rightfully that the Russofile separatists have not adhered to it (despite surprising analysts by agreeing to it in the first place). If the Ukrainian military were to make any gains in the fighting, this would lead to additional leverage at the negotiating table—which Russia is already calling for a return to. More importantly, the failure of the ceasefire at this precise point may in fact be good thing. For it will compel the EU and the U.S. to follow through on their sanctions threat, which they may have backed away from had the ceasefire lasted. More spine stiffening in the West is a good thing, something this entire crisis has in fact been good for.

Yet let us be clear-eyed about the double game Putin is playing. The EU trade deal is a very bitter pill for Putin and Russia. He and his coterie of high officials have been seething about it, before and since. This means that his Plan B strategy of continuing to destabilize eastern Ukraine is likely to be doubled down on. If he can’t have Ukraine’s industrial and somewhat Russian leaning heartland—even by sham referendum, à la Crimea—he will certainly continue to use his contrarian band of mercenaries to bleed the weak Ukrainian military, though already this has pushed Ukraine even faster back into the West’s fold. So now it’s about punishing Ukraine for daring to spurn Mother Russia, including cutting off Ukraine from the gas supplied by the petro arm of the Russian state: Gazprom.

In a major test of its credibility, the EU now needs to make good on its threat. Putin, fearing this, is actually attempting to show such “good faith” in the negotiations, on the assumption the EU will get weak in the knees. The U.S. needs to do the same, proceeding forthwith to turn the economic screws tighter still. At the moment this is the best means for compelling Russia to stop destabilizing eastern Ukraine, although of course it is clear that Moscow lacks even nominal control over most of the various mercenary groups. What it can do is cease the major border violations and delivery of arms, including the missiles that are being used to shoot down Ukrainian aircraft.

But there is more the West needs to do, and this involves military forces, military posture, and deterrence. After all, what caused Putin to blink in the first place? Sanctions alone? Not likely, just trace the first two fairly light sanctions rounds and see what Russian behavior followed. Oh, say certain talking heads, this was all part of Putin’s brilliant plan in the first place i.e. he never intended anything more than issuing “credible” threats that would lead to Russia being allowed to continue wielding influence over a newly confederated Ukraine. This was his Plan A they claim, begging the question all the way.

A closer look at the evidence evinces a different take. Putin has been making this up as he goes along. Remember, he had no plan of even taking Crimea at the outset of this crisis. Certainly it was impressive in sheer tactical terms, a demonstration that all those Gazprom profits have been ploughed right back into rebuilding the beleaguered Russian military forces. But Putin et al. had no thoughts of this right up until Yanukovych fled, and not even before the Ukrainian Parliament issued a formal call for new elections—that is the catalyst that sparked the enterprising stratagem on Russia’s part. But after some obvious success on the fly, Putin overplayed his hand. What wasn’t so brilliant was forgetting that Ukraine has other options, and miscalculating that Russia’s swagger would bring its leaders to heal.

The backfire of Putin’s gambit has been so blatant that Finland and Sweden are now seriously leaning toward joining NATO, and the Baltics are ratcheting up their defense spending as well as welcoming aircraft from around the Alliance, not to mention American paratroopers. What is more, NATO itself has a renewed raison d’etre, which has long been needed—keep your eyes on the updated agenda for the NATO summit this fall in Wales. Allies such as Poland are increasing defense spending. And Europe is in the midst of developing other petroleum sources that do not involve Gazprom. Moreover, the voices have grown stronger in their denunciation of the new international norm that says borders are violable and territory of others is annexable (a welcome trend after all the throwing up of hands inside the U.S. foreign policy establishment—do these experts think Moscow isn’t closely monitoring this as well?).

So what did cause Putin to blink? The sanctions did play a minor causal role. But the more consequential causes comprise moves on the military chessboard—European and American aircraft, American troops, NATO force posture changes, U.S. intelligence assistance, etc.—and the fact that were Russia to invade the east, not only would blood have been spilled, but the West would have furthermore begun providing full-scale lethal aid to Ukraine. However, it is important to recognize the West was nearly a day late and a dollar short. It was a close call, as once Putin got going—public opinion and elite Russians alike began calling for additional annexation—he practically engendered a constraint against his own backing down.

As such, it is important to understand that conventional deterrence was not sufficient prior to or even during the crisis. The U.S. and Europe should have gone further, faster. The sanctions should have been tough in the first round, and what would have ratcheted up deterrence in time would have been a full-scale military ground exercise in Poland—simulating response to a Russian incursion—combined with announcements of new bases in Poland or the Baltics and a direct credible threat of significant lethal aid for Ukraine. Fortunately, according to Russian sources Putin was just smart enough to realize this would have been in the offing anyway.

But this means that conventional deterrence is not yet fully in place. Thus, the U.S. and Europe should now proceed to take the steps that were previously necessary, for they still are. For example, Stephen Hadley—George W. Bush’s National Security Advisor, about the only high level foreign policy official from that Administration that emerged with his reputation intact—made a critically important strategic point at the Center for New American Security’s recent Washington conference:  what matters most regarding the U.S. rebalance to Asia is how strong its response to Putin is. He is right. It’s not just Putin that we need to be concerned about; it is also the calculations that China’s President Xi and his bellicose military brass are making. Beijing is watching all of this very closely.

At the NATO summit it would be prudent to follow-up NATO’s suspension of cooperation with Russia with an official Review, with one of the options being maintaining the suspension and another being to end it (and all other forms of cooperation). Because we still need Russian help with a handful of key things like missile defense, Iran, Syria, cyber, etc., the aim would be to list ending the NATO Russia Council and the Founding Act as an option, but with the unstated intention of not actually following through. As NATO’s Deputy Secretary General Alexander Vershbow has been arguing, Russia has begun treating us and the Alliance as an adversary. This is why we need to go beyond suspension and dangle complete cessation, even if for the time being we don’t plan to make good on this threat.

Regarding troops placement, however, the U.S. needs to use this as the major means of reassuring our allies. It would behoove us to make the U.S. number 1000, going up from the temporary placement of 600 paratroopers (this could include 100-150 soft forces, such as trainers). We also need to do our level best to get the western Europeans to add to this total, or we risk dis-incentivizing them to augment their own capabilities all over again. We should try to get them to match, or do at least half as much as the U.S. will. But to entice them fully, we should propose not permanent placement but rotational; except together we and the Europeans regularize the “rotational” placement in perpetuity. This way we don’t officially cross the reddish line of permanent placement, but we nonetheless achieve upgraded deterrence and major mollification of Poland and the Baltics (plus the West Europeans wouldn’t have as many political risks in endorsing rotational placement).

We are likely to achieve increased capabilities commitments from the East Europeans, but not the West Europeans. So instead of a summit “basket” on capabilities—or in addition to one—we either need to add one on deterrence or add deterrence to the reassurance basket. Clearly a regularized rotational U.S.-Europe troop placement will go most of the way toward re-establishing western conventional deterrence. But to go all the way, western allies also need to conduct a yearly exercise in Poland (and make announcements of the future years this new major exercise will be taking place in the Baltic states). This should be a major ground-air exercise of the NRF focused on defending an invasion from the east.

But the fact is, we should not congratulate ourselves. Not only are we not out of the woods fully re: eastern Ukraine, but we barely persuaded Putin not to take it by force. The U.S. and Europe should have conducted an exercise ahead of the election in Ukraine, as sanctions / non-lethal aid / air policing / aircraft placement / puny exercises were only sufficient in conjunction with Putin realizing that if he had a fight on his hands—with Ukraine—that would no doubt have led to the West upping the ante and offering Ukraine direct military aid and NATO membership.

Regarding capabilities the U.S. probably should endorse both the German “upstream” idea on clustering members’ capabilities and the UK’s “downstream” idea for an operational cluster of the most capable western allies. It is worth remembering that crude measures like the level of overall defense spending are far less important than the current state of military capabilities, which lately have been enhanced even by western allies that have reduced their defense spending (e.g. France, the UK, and Germany). I also endorse Hans Binnendijk’s proposal for a line in the summit committing the Alliance to augmenting its operational air capabilities to be able to conduct 30-day operations a la Libya (with the necessary aircraft / crews / ISR / tankers). The Alliance needs to be thinking of capabilities in full spectrum terms, and air power is the biggest gap.

In conclusion, the West should proceed with the full slate of seriously toughened sanctions, targeting Gazprom and other key firms in major sectors of the Russian economy. Tightening these economic screws is likely the most effective means of getting Putin to begin plugging the border. However in grand strategy terms, he needs to be deterred from snatching future territory, like Transnistria, and reinforcing his ugly new international relations norm by deeply interfering in the internal affairs of others in the region. Let Crimea be the apogee of revanchist Russian aggrandizement. It is time for global security and international law to push back strongly against quixotic Russian dictates.